Rapid Electronic Bill of Lading Interoperability Trial with Two Blockchain Providers – Ledger Insights
Swift announced that it is working on proof of concept samples to enable interoperability between different electronic waybill (eBL) solutions. Eight out of ten of the approved eBL solutions use blockchain and so far it works with two of them, CargoX and edoxOnline.
Despite COVID, only about 1.5% of waybills are electronic. In February, the Digital Container Shipping Association (DCSA) made an important breakthrough by getting nine major ocean liners to commit to eBL. Within five years, half of their bills of lading will be electronic, increasing to 100% in ten years.
A recent McKinsey study predicted that eBL could enable $6.5 billion in direct cost savings and $30–40 billion in growth in global trade.
However, there are ten different approved eBL providers. That involves potentially ten different integrations that need to be created and maintained. But more than that, without interoperability, all participants in a shipment – shipper, consignee, trade finance bank and carrier – must use the same eBL network.
In February 2022, BIMCO, DCSA, FIATA, ICC and Swift formed the FIT Alliance to promote shipping standards and eBLs. A FIT Alliance survey earlier this year found that only 5% of respondents had fully switched to eBL. Almost three quarters were concerned about choosing the right eBL platform and interoperability.
Hence the need for an interoperability solution. As a first step, DCSA has established eBL standards for data and processing for container shipping. And it has been conducting its own proofs of concept since last year. BIMCO developed standards for bulk and liquid shipping and FIATA for eBLs issued by freight forwarders.
Swift’s eBL POC
Swift says it developed an API that uses the DCSA specification. “Our proposed solution offers a highly secure single window that avoids the need for multiple inefficient connections,” said Terry Hubert, Global Trade Strategist at Swift. “The goal of the proof of concept is to have visibility over the exchange of eBLs across trading platforms, with Swift as a connecting network.”
During a follow-up to one of the DCSA studies, eBL provider Bolero observed that three things are necessary for interoperability. “The first is a common structure for the eBL data, the second is verifiable party identities, and the third is the sharing of identification tokens between systems.”
CargoX agrees. “By interacting through a connecting partner that acts as an identity proxy, a new level of interoperability is achieved that enables frictionless global commerce,” said Peter Kern, VP of CargoX.
SWIFT plans to share the details of the POCs later in the year and also start a second phase involving banks.
Meanwhile, SWIFT has recently been involved in other interoperability efforts, including for tokenized digital securities. Another targets central bank digital currency (CBDC), both to enable cross-border CBDC payments and the integration of CBDCs with conventional payment systems.